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This document discusses the advantages and disadvantages of globalization. It provides definitions of globalization from various sources that emphasize free competition and a single global market. The key advantages listed are better capacity utilization, improved exports and foreign reserves, easy technology transfer, and changes to attitudes and expectations. However, the disadvantages highlighted are an unfavorable international situation, benefits only accruing to small sections of society, neglecting realities like the rural agrarian nature of India, increased debt risks, unsuitability for India, and main benefits going to rich countries at the cost of developing nations like India.
This document discusses the advantages and disadvantages of globalization. It provides definitions of globalization from various sources that emphasize free competition and a single global market. The key advantages listed are better capacity utilization, improved exports and foreign reserves, easy technology transfer, and changes to attitudes and expectations. However, the disadvantages highlighted are an unfavorable international situation, benefits only accruing to small sections of society, neglecting realities like the rural agrarian nature of India, increased debt risks, unsuitability for India, and main benefits going to rich countries at the cost of developing nations like India.
This document discusses the advantages and disadvantages of globalization. It provides definitions of globalization from various sources that emphasize free competition and a single global market. The key advantages listed are better capacity utilization, improved exports and foreign reserves, easy technology transfer, and changes to attitudes and expectations. However, the disadvantages highlighted are an unfavorable international situation, benefits only accruing to small sections of society, neglecting realities like the rural agrarian nature of India, increased debt risks, unsuitability for India, and main benefits going to rich countries at the cost of developing nations like India.
Globalization INTRODUCTION After crisis of 1991, India was helped by IMF with conditions of structural reforms. From this structural reform India enter into a new economic world. world of LPG (liberalization, privatization, globalization). GLOBALISATION • Meaning and definition Russi mody – ‘‘Globalisation is a two way traffic, first it means free competition. High productivity using new technology and second selling goods in a single market of a whole world.” This definition emphasises two major aspects of globalisation. firstly there will be free competition in the economy. And secondly, globalisation leads to a single market of the whole world. The World Bank – Globalisation means (a) gradual abolishment of import controls over all items including consumption goods. (b) Reducing the rate of import duty. (c) privatising public sector enterprises. The definition explains the process globalisation. Advantages of Globalisation • 1) Better capacity utilisation – The major advantage of globalisation claimed is in the form of better utilisation of capacities of the economy. better utilisation of capacities would lead to economics of scale. By button (1987) and Kim and park they pointed out that globalisation lead to better utilisation of productive capacities of the different sectors of the economy. Use of productive capacity generates economies of large scale. such as division of labour marketing economies, technological economies etc. 2) Improvement in Reserves and Exports – According to sukumar basu (1992) globalisation of Indian economy would give three major benefits. a) globalisation would help to improve India's foreign exchange reserves. b) globalisation would help to increase confidence of India's creditors. Advantages of Globalisation • Foreign investors and non-residence Indians. This would help to getting more inflow of foreign capital. • c) Globalisation would encourage entry of more MNC’s and direct foreign investment in India. • “ in other words, globalisation of the economy would help to create comparable investment climate in a country. 3) Easy and Quick Technology Transfer – Globalisation leads to rapid increase in knowledge which in turn leads to faster development of the country. There is continuous research and development work going all around the world.it includes new technology, new resources, and new markets. if new technology rapidly and easily transferred from one part to the other part of the world it will help economic progress. Advantages of Globalisation • 4) Helps to change attitudes of the people Globalisation of the economy would lead to favourable change in management skill and labour attitude. This advantage arises in this way globalisation leads to invitation /appointment of foreign managerial personnel or top officers in the industries of the country. This people would bring with them there life-style. There life style will have good influence on the Indian society and labour community. • 5) Globalisation Fulfils Three Expectations – K.S.Krushnaswami pointed out that there are three expectations from the globalisation of the economy. a) globalisation leads to foreign competition in the domestic market. b) globalisation leads to reduction of the cost of production and improving efficiency and productivity. c) globalisation leads to free mobility of capital and technology. Disadvantages or Risk of globalisation • 1) International Situation not Favourable – The success of the globalisation policy depends upon international environment it was favourable when South-East Asian countries adopted this policy.in the present situation the international environment is not favourable. 2) Beneficial to small sections – The globalisation experience of other countries tells that it leads to devlope the culture of consumerism in the society. The consumerism cover maximum 20% of population. This will be upper and upper-middle class of the society. Thus the rest of population will not get benefit from the globalisation. 3) Reality Ignored – Indian economy is basically rural and agrarian in character. This reality is ignored by the framers of the globalisation policy. In this context following points are emphasised. a) The private foreign capital may not flow to agriculture sector. b) There will not be automatic adjustment in agriculture. c) The problem of population growth has been neglected by the makers. Disadvantages or Risk of Globalisation 4) Danger of Increase in Debt – The most important disadvantage of globalisation of Indian economy is increasing debt. Many of developing countries are already under heavy debt. In such a situation globalisation would lead to more and more import and higher import bills. 5) Not Suitable to India – India was not truly ready for the reforms like globalization. The awareness about these changes was lacking in the society. 6) Beneficial to Rich Countries – The important argument against globalisation is that it would help only the rich countries or group of 7 nations. The cost of benefit of rich countries will have to be paid by developing countries like India. India will have to become submissive to the external pressure. Thank you…!